net profit

Definition:

1. The amount by which the proceeds of a sale exceed the total expenses associated with the sale. 2. The financial gain made by an accounting entity over a period measured after allowing for all expenses incurred during the period including taxation and interest on long-term loans. The term is now not often used in this sense in Britain because the Companies Act 1985, now requires that in a profit and loss account this item must be called ‘profit for the financial year’. In America the term ‘net income’ is more commonly used than ‘net profit’ in this sense. In the past ‘net profit’ sometimes referred to profit measured without deducting either taxation or interest on long-term loans or both.



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